Skip to main content

HHS Offers States $275M for Care Delivery, Payment Models

 |  By John Commins  
   July 24, 2012

The federal government is making available to states $275 million to design and test cost-effective care delivery and multi-payer coordination models.

"As a former governor, I've seen states in action and know what great laboratories they are for innovations we can put into practice nationwide," Health and Human Services Secretary Kathleen Sebelius said in a media release.

States may apply for the funding from two separate pots depending upon how far along they are in planning systems to deliver coordinated care for the millions of people who are expected to receive health insurance coverage under the Affordable Care Act.

"They want to give states the room to innovate and find ways to address the quality and cost issues," says Neva Kaye, managing director for health system performance at the National Academy for State Health Policy.

"States are in a lot of different places in that effort. Some are ready to launch or have done a lot of work in that area and some are just starting to think about what they might do. This is trying to get the support out to the states and meet them where they are," Kaye says.

The states are expected to design or test their cost-effective multi-payer payment and delivery systems for Medicare, Medicaid, and Children's Health Insurance Program enrollees with input from stakeholders across the care delivery spectrum, including private payers, providers, employers, and community leaders.

Model Testing awards totaling $225 million will be available for five states over the next three or four years that can demonstrate that they are ready to implement their already developed integrated care models.

The remaining $50 million in the Model Design pot will be divided between 25 states that are not as far along the implementation continuum. The money will be used to provide financial and technical assistance for those states as they decide what types of systems improvements would work best for them.

Kaye says HHS recognizes that different states will require different care delivery designs.

"What works in Vermont may not work in Texas, and what worked in Texas may not work in Idaho. But part of what worked in Vermont may work in Idaho," she said. "It isn't that you do everything in lock step but certainly you could align incentives and align approaches which would make it easier on the providers and also enable the payers to send a consistent message."

Kaye says coordinating scare primary care resources will be particularly important as millions of people obtain health insurance coverage in the coming years under the Affordable Care Act.

"People coming through the door, particularly in the expanded population, they are unlikely to have had the preventive and primary care that they need because they wouldn't have had coverage. They are going to come through the door looking for that. We know how stretched primary care providers are and how little time they get to spend with patients and now they are going to have more patients," she says. 

"In some senses primary care has to rearrange itself, perhaps move more toward a team-based approach with the medical home program that some states have launched."

"Another thing they'll need is to agree on a common set of metrics so you know the primary care provider has kept the patient well, so the providers aren't being pulled in several different directions and they can really focus on providing care," she says. "It isn't so much that there is confusion about what the goals are and what are the possible strategies for getting there. What they need is the part that figures out what strategies are going to work to get me down that path."

The state applications for funding will be reviewed by CMS and its independent Office of the Actuary and by an independent review panel. CMS said it expects to offer a second round of Model Testing awards next year.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

Tagged Under:


Get the latest on healthcare leadership in your inbox.